FTX repayments, Tariff Battles, and a Last-Minute Acquisition!

First up, Happy New Year to all. May we all stack a sizeable amount of Sats this year!

This Week in Crypto

Thankfully (or not so thankfully depending on your perspective), the holiday season is over so these horrible red numbers cease to fill up my screen. $IBIT, notably, had its largest outflow ever yesterday ($332M) - a decent chunk of this may be attributable to a basis trade unwind (no net sell pressure on BTC as the other leg of the trade is closed at the same time).

• I suppose it can only get better from here on out?

Given the holiday season, there’s not a huge amount to write about just yet, so given the short note this week, I’d strongly encourage you to read last week’s edition which looked back on 2024 and looked ahead to 2025. It was one of our best editions yet!

Anyway, moving on, the 3rd of January was the FTX effective date for creditor repayments. From what we can gather the following seems to be the case:

• Convenience Classes: Customers with claims of $50,000 or less will receive their distributions first. This initial distribution is roughly $1.2 billion.

• Entitlement Class: Larger creditors >$50,000, totalling around $10.5 billion, will start receiving distributions in phases throughout 2025, including both initial payments and interest on the unpaid portion of claims until they are paid in full.

• The vast majority of these claims (probably 50-70%) were bought by firms outside of crypto - meaning money will be unlikely to flow back into the ecosystem.

• The remainder of the assets are their venture holdings, such as Anthropic.

Elsewhere, predictably, there was only one thing on Saylor’s list for Father Christmas:

A few more noteworthy headlines:

• E-Trade, owned by Morgan Stanley, is exploring the possibility of offering cryptocurrency trading services.

• In pursuit of economic recovery Syria proposes to legalise Bitcoin and encourage it’s usage, potentially as a channel to sidestep sanctions

• The IRS has delayed the implementation of new cryptocurrency tax reporting requirements until January 1, 2026, providing additional time for digital asset brokers and investors to adapt to regulations that include cost-basis reporting.

This Week in TradFi

It was a great year for the U.S. stock market, but Wall Street saw some slight losses as we closed out the year. 

• On Tuesday, the three major U.S. stock indexes all closed negatively. However, Santa definitely came through for anyone who decided to just buy and hold - 2024 saw an overall increase of 28.6% for the Nasdaq, 23.3% for the S&P, and 12.9% for the Dow. 

• The three indexes also closed lower yesterday but increased slightly today, with traders still uncertain on U.S. economic data and upcoming policy changes with the Trump administration. We’re on track to close the week down 1% in the S&P and Dow and down 2% in the more tech-heavy Nasdaq. 

• And the tariff battle has begun, with China adding 28 U.S. companies to its export controls list. The country is also prohibiting the export of dual-use items (things that can be used for both civilian and military purposes) to those 28 companies. The dual-use prohibition could be particularly consequential, given China’s massive manufacturing influence, but it’s still unclear how exactly they will define the dual-use list.

On the annual front:

• The Mexican peso saw its biggest annual drop compared to the dollar in 16 years, closing out the year down 23%. The peso had a rollercoaster year, gaining steadily in the first half of the year, reaching a nine-year high in April at 16.3 pesos per dollar. However, it started to decline in June following Mexico’s election and then continued to drop after Trump’s election and threats of tariffs against Mexico.

• China’s central bank is likely to cut rates (currently at 1.5%) sometime in 2025. This aligns with China’s larger desire to create a more market-driven interest rate curve, and the central bank says it will prioritize the “role of interest rate adjustments” over “quantitative objectives” for loan growth.

• The number of UK shoppers fell last year by 2.2%, the biggest drop since pandemic year 2021 - continued evidence of the country’s economic slowdown. Even with Christmas shopping, Q4 was particularly rough, with the number of shoppers falling by 2.5% YoY.  

This Week in Tech

Accounting startup Bench will be acquired by Employer.com in a last-minute deal.

• Bench had raised a total of $113M from backers like Shopify and Bain Capital Ventures, and its last raise was a $60M Series C in 2021. 

• The startup abruptly shut down last week, leaving users stranded even after payment had just gone through for some of them. They told users their data would be available to export from the platform until March 2025 and recommended filing an extension with the IRS while users managed the transition. 

• The former cofounder and CEO, who departed the company shortly after the company’s Series C, posted a thread on X about the shutdown, claiming he’d been replaced by board members after disagreeing about the company’s future. 

• Employer.com is a relatively new company, headed by Jesse Tinsely, who was previously with Recruiter.com and BountyJobs. The company is reportedly acquiring multiple companies in the HR space and is entirely self-funded. 

• The acquisition allows Bench customers to continue to use Bench’s services (at the very least they won’t have to file that dreaded IRS extension request!) and potentially branch into using Employer.com’s other payroll and onboarding services.

Tesla is in the news right now for a multitude of reasons, unfortunately none of them positive.

• The company delivered fewer cars last year than 2023, marking its first down year since Tesla began delivering cars in 2012. 

• Tesla announced on Thursday that it had delivered almost 1.8M vehicles in 2024, down 2.2% from 2023. The stock dropped a little over 5% as a result. 

• In general, investors should be confused about the future of the company (just in case we have to tell you again, that is not investment advice). The company had warned investors in early 2024 that numbers might be lower that year, claiming they were in between “two major growth waves”. However, Tesla has abandoned plans to make their $25,000 electric vehicle, and it’s unclear what, if any, new models are in the short-term pipeline, though Musk’s current focus is on creating a fully functioning robotaxi. 

As usual, below are some fundraising announcements, M&A, and tech personnel changes that caught our eye:

• Consumer goods company Unilever is in talks to acquire India-based skincare brand Minimalist for up to $350M. 

• KoBold Metals has closed a $537M Series C to help build a mine in a copper deposit it found using AI. 

• Middle East-based meal delivery startup Calo has raised a $25M Series B, led by Nuwa Capital. 

Arch is building a next-gen wealth management platform for individuals holding Alternative Assets. Our flagship product is the crypto-backed loan, which allows you to securely and affordably borrow against your crypto. We also offer access to bank-grade custody, trading and staking services, powered by BitGo.

Disclaimer: None of the above is financial advice, seriously.